Naked Brand Group Limited Enters Into Non-Binding Letter Of Intent To Acquire A Leading U.S. Online Women’s Retailer

September 6, 2018

SYDNEY — September 6, 2018 — Naked Brand Group Ltd. has entered into a non-binding letter of intent to acquire a leading U.S. online retailer of women’s apparel. The purchase price under the transaction is expected to be $42.5 million, which would include cash, stock and assumption of approximately $6.1 million of the retailer’s debt.

Combined with Naked’s existing Frederick’s of Hollywood e-Commerce license revenue, which has grown 36 percent in the last 12 months, a successful closing of this acquisition is expected to take Naked’s projected e-Commerce revenues in excess of $70 million for FY2019. Including integration synergies, management expects the combined e-Commerce business to generate a projected EBITDA contribution of $11.3 million and projected net income of $5.3 million for FY2019. Projections for revenue are based on an assumption of approximately 26 percent year-over-year revenue growth for Frederick’s of Hollywood and minimal growth assumed for the retailer’s business.

The prospective acquisition represents an integral component of Naked’s major focus on expanding the Company’s direct to consumer product and brand mix. If the transaction is consummated, e-Commerce would represent approximately 43 percent of projected group revenues, with overall direct to consumer channels (including owned retail and outlet stores) reaching 70% of projected revenue contribution, for FY2019.

The intimate apparel industry in the United States is expected to grow to $250 billion by 2022.

“We are continuing to make strides in our digital and e-Commerce focused strategy that we believe will accelerate our growth trajectory and drive meaningful EBITDA contribution in FY2019,” said Justin Davis-Rice, CEO, Naked Brand Group. “The acquisition would augment our proprietary digital operating platform to create ongoing synergies that we believe will produce over $70 million in e-Commerce revenues in the United States for FY2019 and will be accretive to Naked shareholders over the long term,” concluded Davis-Rice.

The letter of intent is non-binding and the Company has not entered into a definitive agreement for the proposed transaction. Accordingly, there can be no assurance that the transaction will occur. The proposed transaction is subject to negotiating the terms of, and executing, a definitive agreement relating to the proposed transaction and obtaining and satisfying all other necessary closing conditions. Furthermore, the terms of the transaction are still subject to discussion and may be changed as a result of any material positive or adverse change to the business of either party. Accordingly, there can be no assurance that a transaction will be entered into or that the proposed transaction will be consummated on the terms described in this press release or at all.